The financial growth of the UK vaping industry has been highlighted in new research.
An analysis of the category, carried out by the Centre for Economics and Business Research (CEBR) on behalf of the UK Vaping Industry Association (UKVIA), found that the vaping sector grew by 23.4% from 2017 to 2021, an increase of £251m, and stood at £1.325bn in 2021 alone.
The report also found that when indirect economic benefits such as supply chain support and the spending power of vape sector workers is factored in, the economic impact more than doubles to £2.8bn.
The number of people directly and indirectly employed in the vape sector - such as those employed elsewhere in the supply chain – was 17,700 in 2021 while the contribution vaping made to the Exchequer through taxation was £310m in 2021.
The report also looked into the wider socio-economic benefits, such as the potential impact it has had on the health economy. Cebr’s report estimates that the total saving in healthcare costs associated with smokers switching to using vaping products was £322m in 2019. The research organisation goes on to say that “the potential healthcare saving if 50% of all smokers switched to vaping” would have been £698m in 2020.
Owen Good, head of economic advisory at Cebr, said: “The findings of the vaping industry’s first-ever economic impact report demonstrates its significant success as a fast-growing disruptive sector.
“Whilst many high street retailers have suffered in recent years, the vaping sector has bucked the trend, with significant growth both in-store and online. Even the effects of the pandemic have not significantly hampered the sector’s growth.”
“The sector’s growth has been hugely beneficial to the UK economy; businesses and their employees directly involved in the industry and those running operations across the wider supply chain; and the NHS which has seen a massive cost saving with increasing numbers of smokers switching to vaping in order to quit their habits.”
John Dunne, director general of the UKVIA, explained how big the category has become. “In little over a decade vaping in the UK has grown from very much a ‘cottage industry’ to one of the fastest growing sectors in not just retail, but the whole economy.
“More people than ever are vaping and by all measures this is a true British success story, creating employment and wealth, generating precious revenue for the Government through taxation while at the same time saving the NHS more than £300m a year through people switching from smoking to vaping.”